Electronically it sounds like there's a short somewhere. I don't own a 360, but I know enough to know that the red light on the unit usually means death. I'm assuming there's a power problem in your Xbox's PSU, which usually consists of phased ripple going through the unit, caused by a bad coupling. This is classic, and in many cases can really screw some things up. Rippled voltage in units can kill them, because just about all electronic devices are designed for "Clean Power" which means DC (Direct Current). Ripple means the one or more couplings or capacitors inside are outputting AC power (Alternating Current) phased in with the DC. Essentially looking like this on a spectrum:
____________~~~____~__~~~~____~~__~~~~~~~____~~~___~~__
You get the picture. The straight lines represent the clean power, or DC, while the squigglies represent the AC ripple presented in the voltage. I'm just assuming, but I do believe that's a possibility, especially considering the unit came back to life. Keep a close eye on it in the future. Often times powersupplies will start to crap out and then come back to life for an extended time, only to die again in the future. It won't explode by any means if this is the case, but it will eventually only output this rippled voltage.
If I'm totally wrong, it's because I don't own a 360, I'm just basing this off of symptoms.
